Estate Planning Myths Series: “Is an Executor paid for dealing with an Estate?”

The duties and responsibilities of acting as the Executor of a deceased Estate can be onerous and time consuming; therefore, if appointing a person to act on your behalf, you should consider whether any provision should be made for such person to compensate them for taking on the role.

Under the Succession Act 1981 (Qld) (the Act), a person acting as the Executor of the Estate is entitled to receive a just and reasonable commission for their attendances in acting as the Executor of your Estate, provided such commission is authorised by the Will, authorised by the Court (in accordance with section 68 of the Act ) or agreed by all beneficiaries of the Estate. In the event such payment is authorised, it would be paid from the assets of the Estate prior to distribution.

However, depending on the value of the Estate, this is something that you may wish to specifically address in your Will; whether to authorise or prohibit such payment, or to make alternative provision.

For example, as a commission payment is generally paid as a percentage of the net value of the Estate, if the value of your Estate is significant, the payment of an Executor’s commission can be a large sum and may significantly reduce the value of your Estate (and, in the event your Executor is also a beneficiary of your Estate, could result in a disproportionate distribution to beneficiaries). This may be considered particularly unreasonable if the attendances by the Executor in administering the Estate have been minimal in comparison to the amount of compensation received by way of commission.

In order to avoid the payment of a percentage of your Estate as commission, or payment of a disproportionate sum, it is also possible to include a clause in your Will directing that your Executor is authorised to be paid for their attendances in administering your Estate at an hourly rate (set by you – such at a specified hourly rate, or a rate equivalent payable to bookkeepers in your local area at the date of your death).

If you wish to review your Will to ensure your Executor is appropriately remunerated for acting in the administration of your Estate, please contact our team on 07 5574 3560 or via email to info@nautiluslaw.com.au.